Half-year Report

Source: RNS
RNS Number : 7312I
Ros Agro PLC
16 August 2021
 

 

 

16 August 2021

 

ROS AGRO financial results for 1H 2021 and 2Q 2021

 

16 August 2021 - Today ROS AGRO PLC (the "Company"), the holding company of Rusagro Group (the "Rusagro"), a leading Russian diversified food producer with vertically integrated operations, has announced the financial results for the six months ended 30 June 2021.

 

 

1H 2021 HIGHLIGHTS

 

-    Sales amounted to RUB 104,372 million (US$ 1,404 million1), an increase of RUB 32,210 million (US$ 433 million, +45%) compared to 1H 2020;

-   Adjusted EBITDA2 amounted to RUB 22,119 million (US$ 298 million), an increase of RUB 10,217 million (US$ 137 million, +86%) compared to 1H 2020;

-     Adjusted EBITDA margin rose from 16% in 1H 2020 to 21% in 1H 2021;

-     Net profit for the period amounted to RUB 17,600 million (US$ 237 million), an increase of RUB 7,870 million (US$ 106 million, +81%);

-     Net debt position3 as of 30 June 2021 amounted to RUB 66,844 million (US$ 924 million);

-     Net Debt/Adjusted EBITDA (LTM4) as of 30 June 2021 was 1.57x.

 

Commenting on the results, Maxim Basov, a member of the Board of Directors of ROS AGRO PLC and CEO of the Rusagro, said:

 

"In 2Q 2021 Rusagro showed growth of adjusted EBITDA backed by revenue increase across Agriculture, Oil & Fats, Meat business segments. Revenue growth was triggered by positive trends both in sales volume and sales prices. Sugar sales decreased due to sales volume reduction partially compensated by sales price growth. Adhering to its mission of making people's lives longer and better, Rusagro continued to participate in the market initiative to provide Russians with affordable food supplies and limited its sales price of sugar and bottled sunflower oil to retail. Thus, sales price of sugar to retail chains in Russia in bags of 50 kg on the basis of the plant didn't exceed 36 roubles/kg inclusive of VAT and sales price of bottled sunflower oil at the plant didn't exceed 95 roubles/litre inclusive of VAT.

 

In 2Q 2021 Rusagro improved adjusted EBITDA margin of Agriculture and Oil & Fats segments as Revenue grew higher than corresponding increase in costs. EBITDA margin of Sugar and Meat segments followed negative influence of higher sugar beet price for Sugar segment (-2 p.p.) and higher costs of feed and animal health protection as well as additional expenses relating to the start of operations in Primorie for Meat segment (-4 p.p.)."

 

 

 

 

 

 

 

 

 

Key consolidated financial performance indicators

in RR million

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Sales 1

104,372

72,1611

32,210

45

54,439

39,2281

15,211

39

Gross profit1

24,379

20,2561

4,123

20

14,290

13,2481

1,042

8

Gross margin, %

23%

28%

(5) pp

 

26%

34%

(8) pp

 

Adjusted EBITDA 1

22,119

11,9021

10,218

86

10,950

6,8961

4,054

59

Adjusted EBITDA margin, %

21%

16%

5 pp

 

20%

18%

2 pp

 

Net profit for the period 1,2

17,600

9,7301

7,870

81

11,074

9,3921

1,682

18

Net profit margin %

17%

13%

4 pp

 

20%

24%

(4) pp

 

 

1 Several adjustments were made to the published 1H and 2Q 2020 indicators:                               

•       Due to Revenue cut-off adjustment Sales for 1H20 and 2Q20 increased by RUB 926 million; Gross profit increased by RUB 391 million; Adjusted EBITDA and Net profit increased by RUB 119 million;

•       Adjusted EBITDA, Gross profit and Net profit for 1H20 was decreased by RUB 343 million due to revaluation procedure, performed at the year end, the same indicators for 2Q20 decreased by RUB 186 million;

•       Revaluation of biological assets led to increase of Gross profit and Net profit in amount of RUB 4,792 million;

•       Net profit decreased by RUB 63 million because of other reserves;

•       Valuation difference for SolPro operations caused Net profit to decrease by RUB 3,436 million for 1H20, and by RUB 72 million for 2Q20;

•       Effect on income tax expense of adjustments above RUB 662 million.

2 Net profit for the period is affected by non-cash income/(loss) on revaluation of biological assets and agricultural produce. See details in business-sections below.

 

 

 

Key financial performance indicators by segments

in RR million

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

 

 

 

 

 

 

 

 

 

Sales, incl.

104,372

72,161

32,210

45

54,439

39,228

15,211

39

Sugar

16,386

14,269

2,117

15

7,745

9,028

(1,283)

(14)

Meat

18,182

14,079

4,103

29

9,621

7,270

2,351

32

Agriculture

11,887

8,001

3,885

49

5,926

3,577

2,349

66

Oil and Fat

61,569

36,732

24,837

68

33,962

19,671

14,291

73

Other

396

289

107

37

224

170

54

32

Eliminations

(4,047)

(1,208)

(2,839)

(235)

(3,040)

(489)

(2,551)

(522)

 

 

 

 

 

 

 

 

 

Gross profit, incl.

24,379

20,256

4,123

20

14,290

13,248

1,042

8

Sugar

4,400

3,882

519

13

2,096

2,666

(570)

(21)

Meat

3,970

2,449

1,522

62

2,009

1,290

720

56

Agriculture

6,595

6,360

235

4

5,063

5,231

(168)

(3)

Oil and Fat

9,705

7,440

2,265

30

5,404

3,946

1,458

37

Other

108

43

65

151

54

38

16

41

Eliminations

(400)

82

(483)

-

(336)

77

(413)

-

 

 

 

 

 

 

 

 

 

Adjusted EBITDA, incl.

22,119

11,902

10,218

86

10,950

6,896

4,054

59

Sugar

4,240

3,554

686

19

1,995

2,533

(538)

(21)

Meat

3,094

2,347

747

32

1,349

1,337

12

1

Agriculture

5,863

2,134

3,729

175

2,837

815

2,022

248

Oil and Fat

7,482

4,421

3,061

69

4,368

2,413

1,955

81

Other

(652)

(615)

(37)

(6)

(335)

(216)

(119)

(55)

Eliminations

2,092

61

2,031

3,323

735

14

722

5,301

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin, %

21%

16%

5 pp

 

20%

18%

2 pp

 

Sugar

26%

25%

1 pp

 

26%

28%

(2) pp

 

Meat

17%

17%

0 pp

 

14%

18%

   (4) pp

 

Agriculture

49%

27%

22 pp

 

48%

23%

25 pp

 

Oil and Fat

12%

12%

0 pp

 

13%

12%

1 pp

 

 

 

SUGAR SEGMENT

In 1H21 Sugar segment earned RUB 4,240 million of adjusted EBITDA (+19% y-o-y) with 26% margin (+1 pp y-o-y). The financial results of the Sugar Segment of 1H21 and 2Q21 compared to 1H20 and 2Q20 respectively are presented in the table below.

Sugar segment 1H and 2Q 2021 Financial Results

in RR million

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Sales

16,386

14,269

2,117

15

7,745

9,028

(1,283)

(14)

Cost of sales

(11,985)

(10,398)

(1,588)

(15)

(5,649)

(6,372)

724

11

Net gain/ (loss) from trading derivatives

-

11

(11)

-

-

11

(11)

-

Gross profit

4,400

3,882

519

13

2,096

2,666

(570)

(21)

Gross profit margin

27%

27%

0 pp

 

27%

30%

(3) pp

 

Distribution and selling expenses

(965)

(1,090)

126

12

(490)

(579)

89

15

General and administrative expenses

(759)

(686)

(73)

(11)

(398)

(337)

(61)

(18)

Other operating income/ (expenses), net

49

548

(498)

(91)

(8)

475

(483)

-

incl. other adjustments to

EBITDA (non-recurring items)

(38)

453

(491)

-

(78)

401

(478)

-

Operating profit

2,726

2,653

74

3

1,200

2,225

(1,025)

(46)

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

4,240

3,554

686

19

1,995

2,533

(538)

(21)

Adjusted EBITDA margin

26%

25%

1 pp

 

26%

28%

(2) pp

 

 

In 1H21 in comparison to 1H20 Sales of Sugar segment improved by 15% - to RUB 16,386 million. Average sugar sales price showed positive trend in comparison to 1H20, when market sugar prices in Russia reached minimum level for 2014-2021. Meanwhile, Rusagro's sugar sales price to retail chains in Russia did not exceed 36 RUB/kg incl. of VAT for white sugar in 50 kg bags at the plant. Rusagro decreased sugar sales volume by 22% y-o-y to 362 thousand tonnes due to reduction of brought forward sugar balance driven by production volumes decrease as the result of lower sugar beet harvest in Russia in season 2020/2021 in comparison to the season 2019/2020. Sales of Sugar segment in 2Q21 compared to 2Q20 decreased as the result of sales volume decrease partially compensated by sugar sales prices growth. 

Sugar revenue growth for 1H21 was partially offset by the decrease in sales of beet pulp of RUB 284 million.

Production, sales volume and sales price of sugar in 1H and 2Q 2021

 

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Sugar production volume, thousand tonnes

39

109

(70)

(64)

29

52

(23)

(44)

Sales volume,

thousand tonnes

362

466

(104)

(22)

160

297

(137)

(46)

Average sales price,

RUB/kg, excl. of VAT

40.7

26.2

14.5

55

42.4

26.9

15.5

57

 

Cost of sales in 1H21 showed a lower increase than Sales y-o-y mainly because sugar beet purchase price in season 2020/2021 in comparison to season 2019/2020 grew less than sugar sales price y-o-y.

 

MEAT SEGMENT

In 1H21 Meat segment earned RUB 3,094 million of adjusted EBITDA (+32% y-o-y) with 17% margin (+0 pp y-o-y). The financial results of the Meat Segment of 1H21 and 2Q21 compared to 1H20 and 2Q20 respectively are presented in the table below.

Meat segment 1H and 2Q 2021 Financial Results

in RR million

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Sales

18,182

14,079

4,103

29

9,621

7,270

2,351

32

Net gain/ (loss) on revaluation of biological assets and agricultural produce

1,267

594

673

113

447

166

281

169

Cost of sales

(15,479)

(12,225)

(3,254)

(27)

(8,059)

(6,147)

(1,912)

(31)

Gross profit

3,970

2,449

1,522

62

2,009

1,290

720

56

Gross profit margin

22%

17%

5 pp

 

21%

18%

3 pp

 

Gross profit excl. effect of biological assets revaluation

2,703

1,855

848

46

1,562

1,124

439

39

Adjusted gross profit margin

15%

13%

2 pp

 

16%

15%

1 pp

 

 

 

 

 

 

 

 

 

 

Distribution and selling expenses

(751)

(559)

(192)

(34)

(420)

(354)

(66)

(19)

General and administrative expenses

(1,670)

(781)

(889)

(114)

(1,000)

(322)

(678)

(210)

Other operating income/ (expenses), net

720

254

465

183

223

111

112

101

incl. reimbursement of operating costs (government grants)

256

(0)

256

-

56

(0)

56

-

incl. other adjustments to EBITDA (non-recurring items)

337

204

133

65

201

135

66

49

Operating profit income/ (expenses), net

2,269

1,364

905

66

813

725

88

12

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

3,094

2,347

747

32

1,349

1,337

12

1

Adjusted EBITDA margin

17%

17%

0 pp

 

14%

18%

(4) pp

 

                   

Sales of the Meat segment increased by 29% in 1H21 and by 32% in 2Q21 compared to the respective periods of the prior year due to the growth of average sales price of meat products by 24% and 26% respectively. The growth of total sales volume by 4% in 1H21 compared to 1H20 triggered by 3% pigs production increase achieved as new pig farms in Tambov Region reached full capacity.

Production, sales volume and sales price of pork products in 1H and 2Q 2021

 

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Pigs production,

thousand tonnes

 

 

151

146

5

3

76

74

2

3

Sales volume,

thousand tonnes

121

116

5

4

62

59

3

6

Average sales prices,

RUB/kg, excl. of VAT

149.9

121.1

28.8

24

154.8

123.2

31.5

26

Cost of sales increased by 27% in 1H21 and by 31% in 2Q21 compared to the respective periods of the prior year mainly due to higher costs of feed and animals health protection.

Net gain on revaluation of biological assets and agricultural produce in 1H21 resulted mainly from an increase in market prices for both bearer and consumable livestock pigs during the reporting period compared to market prices at the end 2020 and respective increase in fair value of livestock in the closing balance.

An increase in Distribution and selling expenses in 1H21 in comparison to 1H20 is mainly due to the rise in the costs of marketing activities.

General and administrative expenses in 1H21 compared to prior year period increased mainly due realization of pork production cluster project in the Primorie Territory.

An increase in Other operating income in 1H21 in comparison to 1H20 is mainly due to partial reimbursement of feed purchase costs and investment loans interest.

 

 

 

 

AGRICULTURAL SEGMENT

 

As at 30 June 2021 Rusagro's area of controlled land stands at 688 thousand hectares (30 June 2020: 642 thousand hectares). In 1H21 Agriculture segment earned RUB 5,863 million of adjusted EBITDA (+175 % y-o-y) with 49% margin (+22 pp y-o-y). The financial results of the Agricultural Segment of 1H21 and 2Q21 compared to 1H20 and 2Q20 respectively are presented below.

Agriculture segment 1H and 2Q 2021 Financial Results

in RR million

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Sales

11,887

8,001

3,885

49

5,926

3,577

2,349

66

Net gain/ (loss) on revaluation of biological assets and agricultural produce

248

3,512

(3,263)

(93)

1,900

3,958

(2,058)

(52)

Cost of sales

(5,540)

(5,152)

(387)

(8)

(2,764)

(2,305)

(459)

(20)

Gross profit

6,595

6,360

235

4

5,063

5,231

(168)

(3)

Gross profit margin

55%

79%

(24) pp

 

85%

146%

(61) pp

 

Gross profit excl. effect of biological assets and agricultural produce revaluation

6,347

2,849

3,498

123

3,162

1,272

1,890

149

Adjusted gross profit margin

53%

36%

17 pp

 

53%

36%

17 pp

 

 

 

 

 

 

 

 

 

 

Distribution and selling expenses

(960)

(978)

18

2

(525)

(498)

(28)

(6)

General and administrative expenses

(634)

(619)

(16)

(3)

(339)

(304)

(34)

(11)

Other operating income/ (expenses), net

87

(80)

168

-

40

1

38

2,760

  incl. reimbursement of    

  operating costs (government   

  grants)

133

61

72

118

133

61

72

118

 incl. other adjustments to EBITDA (non-recurring items)

86

(5)

91

-

63

45

18

40

Operating profit

5,087

4,683

404

9

4,238

4,430

(192)

(4)

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

5,863

2,134

3,729

175

2,837

815

2,022

248

Adjusted EBITDA margin

49%

27%

22 pp

 

48%

23%

25 pp

 

In 1H21 in comparison to 1H20 Sales of the Agriculture segment increased by 49% to RUB 11,887 million thanks to significantly higher sales volume of wheat and higher sales price of all crops, except corn, following global price increase. This was partially offset by sales volume decrease of all other crops, except wheat, especially soybean. Meanwhile, Cost of sales and General and administrative expenses remained relatively stable.

Higher sales volume of wheat in 1H21 compared to 1H20 were affected by management decision in 2020 to push sales timing towards 1H21 in expectation of peak prices, whereas 2019 wheat harvest was mainly sold in 2019.

Opposite situation with soybean, as lower sales volume in 1H21 compared to 1H20 were affected by management decision in 2019 to push sales timing towards 1H20 in expectation of peak prices, whereas 2020 soybean harvest was partially realized in 2020 due to sharp domestic price rise and introduction of export duties.

In 2Q21 in comparison to 2Q20 Sales of the Agriculture segment increased by 66% to RUB 5,926 million because of the same reasons listed above, except that soybean sales volume remains in line between 2Q21 and 2Q20.

Sales volume of crops in 1H and 2Q 2021

Thousand tonnes

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

%

wheat

         360

           82

           278

       341

 218

 36

 182

 505

soybean

         143

         188

           (45)

        (24)

 71

 67

 4

 6

corn

           58

           73

           (15)

        (21)

 8

 65

(57)

(88)

sunflower seeds

             8

           18

           (10)

        (55)

          -  

            1

        (1)

  (100)

barley

             5

           51

           (46)

        (90)

 4

 28

(24)

(84)

Sales price of crops in 1H and 2Q 2021

RR per kilogram,

excl. of VAT

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

wheat

        12.7

        11.2

1.5

13

     12.5

      11.6

0.9

8

soybean

        40.6

        25.6

15.0

59

     39.8

      26.9

12.9

48

corn

        13.2

        14.8

(1.6)

(11)

     14.9

      15.0

(0.1)

(1)

sunflower seeds

        39.2

        20.1

19.1

95

        -  

      22.8

n/a

n/a

barley

        12.0

          9.8

2.2

23

     11.9

        9.5

2.4

26

Net gain on revaluation of biological assets and agricultural produce in 1H21 and 1H20 respectively represents a combination of the two factors. Gain from current year unharvested crops revaluation to fair value less estimated point-of-sale costs equals to RUB 4,720 million in 1H21 against RUB 4,518 million in 1H20. The second factor is the realisation of gain from crops revaluation, recognised in the previous year financial statements and remained unrealised as at the year-end, equals to RUB 4,472 million loss recognised in 1H21 against RUB 1,006 million loss in 1H20, significant loss increase caused by higher revaluation amounts in 2020 due to crops price growth.

Net gain/(loss) on revaluation of crops and its subsequent realisation do not affect the Adjusted EBITDA figure.

Distribution and selling expenses remains at the same levels despite growth in sales volumes, which is caused by changes in sales channels of soybean, export in 1H2020 vs. domestic in 1H2021.

Other net operating income/(expenses) increased as a result of received government grants in higher amount by RUB 72 million, gain of RUB 51 million from release of provision for legal claims in 1H21.

 

 

 

OIL AND FAT SEGMENT

In 1H21 Oil and Fat segment earned RUB 7,482 million of adjusted EBITDA (+69 % y-o-y) with 12% margin (+0 pp y-o-y). The financial results of the Oil and Fat Segment for 1H21 and 2Q21 compared to 1H20 and 2Q20 respectively are presented below.

Oil and Fat segment 1H and 2Q 2021 Financial Results

in RR million

Six months ended

Variance

Three months ended

Variance

 

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

 

Sales

61,569

36,732

24,837

68

33,962

19,671

14,291

73

 

Cost of sales

(51,864)

(29,292)

(22,572)

(77)

(28,557)

(15,725)

(12,832)

(82)

Gross profit

9,705

7,440

2,265

30

5,404

3,946

1,458

37

 

Gross profit margin

16%

20%

(4) pp

 

16%

19%

(3) pp

 

 

 

 

 

 

 

 

 

 

 

 

Distribution and selling expenses

(2,169)

(2,207)

38

2

(1,264)

(1,184)

(80)

(7)

 

General and administrative expenses

(1,014)

(1,062)

48

5

(570)

(496)

(74)

(15)

 

Other operating income/ (expenses), net

136

(171)

307

-

73

(284)

358

-

 

incl. Other adjustments to EBITDA (non-recurring items)

18

(107)

125

-

(95)

(273)

178

65

 

Operating profit/ (loss)

6,658

4,000

2,658

66

3,644

1,982

1,662

84

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

7,482

4,421

3,061

69

4,368

2,413

1,955

81

 

Adjusted EBITDA margin

12%

12%

0 pp

 

13%

12%

1 pp

 

 

                     

In 2021 results of Dairy Products segment are included in Oil and Fat segment due to consolidation of these two businesses. For comparison purpose financial results of the previous years were corrected accordingly. 

Sales volumes to third parties in 1H and 2Q 2021

thousand tons

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

meal

       306

       317

(11)

(3)

       188

       155

33

   21

crude oil

       198

       227

(29)

(13)

         95

       127

(31)

  (25)

industrial fats

       158

       134

24

18

         74

         57

18

   31

dry whey mixes

           7

           7

0

0

           4

           3

1

   16

consumer oil&fat products

       160

       165

(5)

(3)

         85

         89

(4)

    (5)

consumer dairy products

           7

           6

1

16

           3

           3

0

   14

                   

 Sales price to third parties in 1H and 2Q 2021

RR per kilogram, excl. VAT

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

meal

24.6

          13

11.2

83

      25.9

        14.5

11.4

79

crude oil

100.7

        47.5

53.2

112

     112.4

        48.7

63.7

131

industrial fats

88.5

        54.9

33.6

61

      96.6

        57.2

39.4

69

dry whey mixes

81.8

        74.4

7.4

10

      83.8

        73.5

10.3

14

consumer oil&fat products

105.5

        70.9

34.6

49

     108.5

        72.9

35.6

49

consumer dairy products

216.4

      205.6

10.8

5

     219.5

      210.0

9.5

5

                   

In 1H21 in comparison to 1H20 Sales of the Oil and Fat segment grew thanks to higher sales prices for all product categories. Sales price of bottled sunflower oil to retail in Russia did not exceed 95 RUB/l incl. of VAT at the plant.

Cost of sales in 1H21 in comparison to 1H20 increased due to higher prices of raw materials, including sunflower seeds, bulk and tropical oil.

Other net operating income/(expenses) decreased by RUB 307 million as a result of foreign exchange gain of RUB 46 million in 1H21 against RUB 84 million loss in 1H20 and loss of RUB 9 million from release of provision for legal claims in 1H21 against RUB 36 million loss in 1H20.
 

KEY CONSOLIDATED CASH FLOW INDICATORS (NOT IFRS PRESENTATION*)

 

The key consolidated cash flow indicators presented according to management accounts methodology

in mln Roubles

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Net cash from operating activities, incl.

21,348

19,053

2,295

12

12,931

12,574

356

3

Operating cash flow before working capital changes

22,742

12,641

10,101

80

11,312

7,556

3,756

50

Working capital changes

(758)

6,672

(7,430)

-

2,096

5,071

(2,975)

(59)

Net cash from investing activities, incl.

(17,411)

(4,765)

(12,646)

(265)

(15,412)

(2,745)

(12,667)

(461)

Purchases of property plant and equipment and inventories intended for construction

(6,222)

(4,825)

(1,398)

(29)

(4,183)

(2,675)

(1,508)

(56)

Acquisition of SolPro assets

(11,689)

-

(11,689)

-

(11,689)

-

(11,689)

-

Net cash from financing activities

36,373

(13,407)

49,780

-

33,406

(9,484)

42,890

-

Net effect of exchange rate changes on cash and cash equivalents

(102)

173

(275)

-

(72)

(147)

75

51

Net increase / (decrease) in cash and cash equivalents

40,208

1,054

39,154

3,716

30,852

198

30,655

15,489

(*) See Appendix 4

During 1H21 the Company started to acquire SolPro assets (Atkarskiy oil extraction plant), cash inflow corresponding to loans and interest repaid as the result of SolPro assets acquisition is included in line Net cash from financing activities.

The key investments in property, plant and equipment and inventories intended for construction during 1H21 were made in the Meat segment in the amount of RUB 2,846 million (1H20: RUB 2,083 million) due to the purchases related to the construction project in the Russian Far East. Investments in the Oil and Fat segment in the amount of RUB 2,110 million (1H20: RUB 648 million), Agriculture segment in the amount of RUB 911 million (1H20: RUB 1,181 million) and Sugar segment in the amount of RUB 355 million (1H20: RUB 913 million) mainly relate to purchases of machinery and equipment for production facilities renewal and maintenance.

 

 

 

Debt position and liquidity management

in RUB million

30 June 2021

31 December 2020

Variance

 

Units

%

 

Gross debt

181,555

114,929

66,626

58

 

Short-term borrowings

116,206

51,753

64,453

125

 

Long-term borrowings

65,349

63,176

2,173

3

 

Cash and cash equivalents, bank deposits and bonds

(114,711)

(46,029)

(68,682)

(149)

 

Short-term cash, deposits and bonds

(80,740)

(12,064)

(68,676)

(569)

 

Long-term cash, deposits and bonds

(33,971)

(33,965)

(6)

(0)

 

Net debt

66,844

68,900

(2,056)

(3)

 

Short-term borrowings, net

35,466

39,689

(4,223)

(11)

 

Long-term borrowings, net

31,378

29,211

2,167

7

 

Adjusted EBITDA (LTM4)

42,202

31,984

10,218

32

 

Net debt/ Adjusted EBITDA (LTM)

1.58

2.15

  (0.6) pp

 

 

Adjusted EBITDA (LTM)5 without other operating income/expenses

42,496

32,435

10,061

31

 

Net debt/ Adjusted EBITDA (LTM)5 without other operating income/expenses

1.57

2.12

(0.5) pp

 

 

Net finance income/ (expense)

in RR million

Six months ended

Variance

Three months ended

Variance

30 June 2021

30 June 2020

Units

%

30 June 2021

30 June 2020

Units

%

Net interest expense

(2,507)

(2,582)

75

3

(1,213)

22

2

Gross interest expense

(3,774)

(3,357)

(417)

(12)

(1,989)

(335)

(20)

Reimbursement of interest expense

1,267

775

492

64

776

420

357

85

Interest income

3,723

3,572

151

4

1,903

102

6

Net gain/ (loss) from bonds held for trading

(1)

(17)

16

92

(1)

(16)

15

93

Other financial income, net

(163)

(1,351)

1,188

88

(143)

(211)

68

32

Net foreign exchange gain/ (loss)

28

(1,215)

1,243

-

60

(138)

198

-

Other financial income / (expenses), net

(192)

(137)

(55)

(40)

(203)

(73)

(130)

(179)

Total net finance income/ (expenses)

1,051

(379)

1,430

-

546

339

207

61

Net debt decreased at 30 June 2021 compared at 31 December 2020 as a result of an increase in cash and cash equivalents, bank deposits and bonds.

In 1H21 Rusagro continued to enjoy state agriculture subsidies programme. The Rusagro continued to receive bank loans with decreased interest rates under the programme of government support. Under this programme, the government provides subsidies to the banks to compensate the loss of income on credits with decreased interest rates, given by the banks to agricultural producers. In 1H21 IFRS accounts these credits are accounted according to its face value with no adjustments to prevailing market rates. The differences between nominal and market interest rate is recognized as either government grants in a statement of financial position for borrowings received with the purpose to finance investment projects or interest expenses in a statement of comprehensive income for general purpose borrowings.

Net finance expenses of 1H20 in the sum of RUB 379 million changed to net finance income in the amount of RUB 1,051 million in 1H21 as the result of negative dynamics in forex losses in 1H20.

________________________________

(1) The exchange rates used for translation of RUB amounts into USD represent average Central Bank official exchange rate for the respective reporting period for income, expenses and profits and the Central Bank official exchange rate as at the reporting date for balance figures.

(2) Adjusted EBITDA is defined as operating profit before taking into account (i) depreciation included in operating profit, (ii) net gain/ (loss) on revaluation of biological assets and agricultural produce, (iii) non-recurring components of other operating income/ (expenses), net, (iv) share-based remuneration, (v) provision for impairment of loans issued (see Appendix 2 for the detailed calculation of Adjusted EBITDA). Adjusted EBITDA is not a measure of financial performance under IFRS. It should not be considered as an alternative to profit for the period as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and therefore comparability may be limited. We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions of subsidiaries and other investments and our ability to incur and service debt.

(3) The Rusagro determines the net debt as short-term borrowings and long-term borrowings less cash and cash equivalents, bank deposits, bank promissory notes and bonds held for trading.

(4) LTM - The abbreviation for the "Last twelve months".

(5) Starting from the beginning of 2020 part of other operating income and expensed (recurring items) was included in Adjusted EBITDA calculation. Figures of 2021 and 2020 calculated using prior periods' logic (excluding other operating income/expenses) are shown in table Debt position and liquidity management above and in the diagram with Net debt/ LTM EBITDA trend analysis for comparative purposes

 

 

NOTE

ROS AGRO PLC (LSE, MOEX: AGRO) - a holding company of Rusagro Group, a leading Russian diversified food producer with vertically integrated operations in the following branches:

Sugar:

Rusagro is one of the leading Russian sugar producers (№2 in sugar production in Russia and №1 on cube white sugar market in 2020), producing sugar from sugar beet at nine production sites in four regions. Group produces white and brown cube sugar and packaged sugar sold under the brands Russkii Sakhar, Chaikofsky, Mon Cafe, Horoshiy and Brauni. Sugar segment is vertically integrated and sugar beet is supplied by Rusagro's Agriculture segment, which ensures a consistent supply of raw material. Sugar segment also operates a cereal plant and sell buckwheat and rice under the brand Tyoplye Traditsii.

Meat:

Rusagro is the third largest pork producer in Russia in 2020. It operates 18 commercial pork complexes with correspondence to high biosecurity standards, has own compound feed production, slaughterhouses and meat processing plants in Tambov and Belgorod Regions. Since 2016 Rusagro sells retail products under its own brand Slovo Myasnika (Butcher's word).

Agricultural:

Rusagro currently controls one of the largest land banks among Russian agriculture producers, with 688 thousand hectares of land under control located in the highly fertile Black Earth region of Russia (in the Belgorod, Tambov, Voronezh, Kursk, Orel and Saratov regions)
and in the Far East Primorie Region. Land and production sites are strategically located within
the same regions to optimize efficiency and minimize logistical costs. Rusagro is one
of the major sugar beet producers in Russia, but it also produces wheat and barley, sunflower seeds and soybeans. These products are partially consumed by the Meat segment, supporting a synergistic effect and lowering price change risk.

Oil and Fat:

Rusagro is the leading crude sunflower oil and consumer margarine producer, second largest industrial fats and mayonnaise producer in Russia with products sold under eight key brands, such as EZhK, Schedroye Leto, Mechta Khozyaiki, umbrella brend Ya lublu gotovit (includes Moskovskiy Provansal, Novosibirskiy Provansal, Saratovskiy Provansal), Rossiyanka and Saratovskiy Slivochniy. Rusagro operates (including through ownership and the lease) five crushing and three oil and fats plants. Own sunflower and soy oil production allows to control the source of the vegetable oil required to produce oil and fats products. Since 1Q 2021 Oil and Fats segment also operates two milk processing plants in Samara and Ulyanovsk Regions, which produce dry industrial mixes, cheeses, butter and cream sold under three brands: Milie, Buterbrodnoe utro and Syrnaya Kultura.

 

 

 

 

 

 

 

 

FORWARD-LOOKING STATEMENTS

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements do not relate to historical or current events,
or to any future financial or operational activity of the Group.

 

By their nature, forward-looking statements involve risk and uncertainty because they relate
to future events and circumstances, a number of which are beyond the Rusagro Group's control. As a result, actual future results may differ materially from the plans and expectations set out
in these forward-looking statements.

 

The Group undertakes no obligation to release the results of any revisions to any forward-looking statements that may occur due to any change in its expectations or to reflect events
or circumstances after the date of this document.

 

CONFERENCE CALL

Rusagro management is organizing a conference call on Company's 1H and 2Q 2021 financial results for investors and analysts.

Details of the call:

 

Date

16 August 2021

Time

4:00 PM (Moscow) / 2:00 PM (London)

Subject

ROS AGRO PLC 1H and 2Q and 6M 2021 Financial results

Zoom link

 

https://ib-translations.zoom.us/j/81995329724?pwd=cWFRQlRyWk9ibWNqb1lUK3puOTdDdz09

 

Password

 

235894

 

 

 

 

 

 

 

 

 

 

 CONTACTS

 

Svetlana Kuznetsova

IR & ESG Director

Phone:  +7 495 363 1661,

E-mail: ir@rusagrogroup.ru

 

 

 

 

 

 

 

 

 

Appendix 1. Consolidated statement of comprehensive income for the Six and Three months ended 30 June 2021 (in RUB thousand)

 

Six months ended

30 June

Three months ended

30 June

 

2021

2020

2021

2020

Sales

104,371,769

72,161,446

54,438,801

39,228,082

Net gain/(loss) on revaluation of biological assets and agricultural produce

(434,812)

4,410,327

1,591,010

4,324,348

Cost of sales

(79,557,967)

(56,326,166)

(41,739,476)

(30,315,191)

Net gain/(loss) from trading derivatives

(5)

10,556

-

10,638

Gross profit

24,378,985

20,256,162

14,290,335

13,247,877

 

 

 

 

 

Distribution and selling expenses

(4,318,350)

(4,588,049)

(2,455,399)

(2,485,068)

General and administrative expenses

(4,640,837)

(3,682,032)

(2,576,813)

(1,672,556)

Reversal of provision/(provision) for impairment of loans issued

1,852,295

(3,256,721)

1,852,295

-

Other operating income/(expenses), net

1,032,810

1,243,618

275,152

679,753

Operating profit / (loss)

18,304,903

9,972,978

11,385,570

9,770,006

 

 

 

 

 

Interest expense

(2,507,021)

(2,582,278)

(1,212,937)

(1,234,833)

Interest income

3,722,605

3,520,931

1,903,340

1,721,326

Net (loss)/gain from bonds

(1,362)

(17,002)

(1,123)

(16,143)

Other financial income/ (expenses), net

(163,409)

(1,351,245)

(143,191)

(211,247)

Profit before income tax

19,355,716

9,543,384

11,931,659

10,029,109

 

 

 

 

 

Income tax expense

(1,755,228)

186,653

(857,523)

(637,064)

Profit for the period

17,600,488

9,730,037

11,074,136

9,392,045

 

 

 

 

 

Other comprehensive income

 

 

 

 

Total comprehensive income for the period

17,600,488

9,730,037

11,074,136

9,392,045

 

 

 

 

 

Profit is attributable to:

 

 

 

 

Owners of ROS AGRO PLC

17,630,249

9,764,870

11,082,816

9,399,728

Non-controlling interest

(29,761)

(34,833)

(8,680)

(7,683)

Profit for the period

17,600,488

9,730,037

11,074,136

9,392,045

 

 

 

 

 

Total comprehensive income is attributable to:

 

 

 

 

Owners of ROS AGRO PLC

17,630,249

9,764,870

11,082,816

9,399,728

Non-controlling interest

(29,761)

(34,833)

(8,680)

(7,683)

Total comprehensive income for the period

17,600,488

9,730,037

11,074,136

9,392,045

 

 

 

 

 

Earnings per ordinary share for profit attributable to the owners of ROS AGRO PLC, basic and diluted
(in RR per share)

655.25

362.95

411.90

349.35

 

 

Appendix 2. Segment information for the Six months ended 30 June 2021 (in RUB thousand)

 

 

1H 2021

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

16,385,736

18,181,889

11,886,604

61,568,998

396,005

(4,047,463)

104,371,769

Net gain/ (loss) on revaluation of biological assets and agricultural produce

-

1,267,394

248,454

-

-

(1,950,660)

(434,812)

Cost of sales

(11,985,423)

(15,478,892)

(5,539,832)

(51,863,898)

(287,802)

5,597,880

(79,557,967)

incl. Depreciation

(1,440,624)

(2,111,871)

(998,251)

(709,188)

(4,696)

(9,297)

(5,273,927)

Net gain/ (loss) from trading derivatives

-

(5)

-

-

-

-

(5)

Gross profit

4,400,313

3,970,386

6,595,226

9,705,100

108,203

(400,243)

24,378,985

Distribution and Selling, General and administrative expenses

(1,723,373)

(2,420,500)

(1,594,914)

(3,183,122)

(866,823)

829,545

(8,959,187)

incl. Depreciation

(35,379)

(316,798)

(111,439)

(132,357)

(63,495)

9,297

(650,171)

Other operating income/(expenses), net

49,437

719,501

87,182

136,182

15,548,273

(15,507,765)

1,032,810

incl. Reimbursement of operating costs (government grants)

84,440

255,545

132,901

102,725

-

-

575,611

incl. Other adjustments to EBITDA (non-recurring items)

(37,563)

336,546

85,918

17,880

15,509,348

(15,219,857)

692,272

Reversal of provision/(provision) for impairment of loans issued

-

-

-

-

1,852,295

-

1,852,295

Operating profit / (loss)

2,726,377

2,269,387

5,087,494

6,658,160

16,641,948

(15,078,463)

18,304,903

Adjustments:

 

 

 

 

 

 

 

Depreciation included in Operating Profit

1,476,003

2,428,669

1,109,690

841,545

68,191

-

5,924,098

Other adjustments to EBITDA (non-recurring items)

37,563

(336,546)

(85,918)

(17,880)

(15,509,348)

15,219,857

(692,272)

Net gain/ (loss) on revaluation of biological assets and agricultural produce

-

(1,267,394)

(248,454)

-

-

1,950,660

434,812

Reversal of provision/(provision) for impairment of loans issued

-

-

-

-

(1,852,295)

-

(1,852,295)

Adjusted EBITDA*

4,239,943

3,094,116

5,862,812

7,481,825

(651,504)

2,092,054

22,119,246

 

* Non-IFRS measure

 

 

Appendix 2 (continued). Segment information for the Six months ended 30 June 2020 (in RUB thousand)

 

 

1H 2020

Sugar

Meat

Agriculture

Oil and Fat

Other

Eliminations

Total

Sales

14,268,955

14,079,193

8,001,245

36,731,663

288,691

(1,208,301)

72,161,446

Net gain/ (loss) on revaluation of biological assets and agricultural produce

-

594,091

3,511,620

-

-

304,616

4,410,327

Cost of sales

(10,397,786)

(12,224,512)

(5,152,408)

(29,291,877)

(245,536)

985,953

(56,326,166)

incl. Depreciation

(1,316,686)

(1,670,932)

(823,449)

(234,910)

(5,017)

(8,857)

(4,059,851)

Net gain/ (loss) from trading derivatives

10,555

-

-

-

-

-

10,555

Gross profit

3,881,724

2,448,772

6,360,457

7,439,786

43,155

82,268

20,256,162

Distribution and Selling, General and administrative expenses

(1,776,525)

(1,339,052)

(1,596,788)

(3,269,323)

(729,289)

440,896

(8,270,081)

incl. Depreciation

(37,737)

(109,775)

(134,094)

(79,276)

(87,092)

8,857

(439,117)

Other operating income/(expenses), net

547,653

254,410

(80,487)

(170,626)

5,478,518

(4,785,850)

1,243,618

incl. Reimbursement of operating costs (government grants)

72,144

(439)

60,950

86,569

-

-

219,224

incl. Other adjustments to EBITDA (non-recurring items)

453,105

203,825

(4,706)

(106,639)

5,499,598

(4,628,415)

1,416,768

Reversal of provision/(provision) for impairment of loans issued

-

-

-

-

(3,256,721)

-

(3,256,721)

Operating profit / (loss)

2,652,852

1,364,130

4,683,182

3,999,837

1,535,663

(4,262,686)

9,972,978

Adjustments:

 

 

 

 

 

 

 

Depreciation included in Operating Profit

1,354,423

1,780,707

957,543

314,186

92,109

-

4,498,968

Other adjustments to EBITDA (non-recurring items)

(453,105)

(203,825)

4,706

106,639

(5,499,598)

4,628,415

(1,416,768)

Net gain/ (loss) on revaluation of biological assets and agricultural produce

-

(594,091)

(3,511,619)

-

-

(304,617)

(4,410,327)

Reversal of provision/(provision) for impairment of loans issued

-

-

-

-

3,256,721

-

3,256,721

Adjusted EBITDA*

3,554,170

2,346,921

2,133,812

4,420,662

(615,105)

61,112

11,901,572

 

* Non-IFRS measure

 

 

 

 

Appendix 3. Consolidated statement of financial position as at 30 June 2021
(in RUB thousand)

 

 

 

30 June 2021

31 December 2020

ASSETS

 

 

Current assets

 

 

Cash and cash equivalents

52,074,750

11,866,798

Restricted cash

36,534

143,637

Short-term investments

42,300,594

19,583,523

Trade and other receivables

11,256,011

9,512,286

Prepayments

2,868,302

2,941,224

Current income tax receivable

511,892

646,162

Other taxes receivable

11,058,957

5,506,675

Inventories and short-term biological assets

         68,476,829

69,001,368

Total current assets

188,583,869

119,201,673

 

 

 

Non-current assets

 

 

Property, plant and equipment

100,194,636

87,519,088

Inventories intended for construction

2,413,153

3,353,330

Right-of-use assets

6,875,198

6,934,567

Goodwill

2,364,942

2,364,942

Advances paid for non-current assets

8,043,093

6,905,003

Long-term biological assets

3,303,267

2,528,128

Long-term investments and receivables

42,527,657

42,692,320

Investments in associates

314,382

257,782

Deferred income tax assets

4,350,562

3,566,168

Other intangible assets

637,434

619,793

Other non-current assets

442,569

205,793

Total non-current assets

171,466,893

156,946,914

Total assets

360,050,762

276,148,587

 

 

 

LIABILITIES and EQUITY

 

 

Current liabilities

 

 

Short-term borrowings

116,206,334

51,753,475

Lease liabilities

926,058

943,859

Trade and other payables

17,846,303

16,016,138

Provisions

750,804

69,546

Current income tax payable

254,661

4,096,199

Other taxes payable

10,376,892

179,796

Total current liabilities

146,361,052

73,059,013

 

 

 

Non-current liabilities

 

 

Long-term borrowings

65,349,000

63,175,720

Government grants

8,651,762

8,536,899

Lease liabilities

4,755,454

4,855,508

Deferred income tax liability

2,070,543

487,049

Total non-current liabilities

80,826,759

77,055,176

Total liabilities

227,187,811

150,114,189

 

 

 

Equity

 

 

Share capital

12,269

12,269

Treasury shares

(490,607)

(490,607)

Additional paid-in capital

26,964,479

26,964,479

Other reserves

1,363,177

1,363,177

Retained earnings

105,043,352

98,185,038

Equity attributable to owners of ROS AGRO PLC

132,892,670

126,034,356

Non-controlling interest

(29,719)

42

Total equity

132,862,951

126,034,398

Total liabilities and equity

360,050,762

276,148,587

 

 

 

Appendix 4. Consolidated statement of cash flows for the Six months ended 30 June 2021 (in RUB thousand) - NOT IFRS PRESENTATION (*)

 

Six months ended

 

30 June 2021

30 June 2020

Cash flows from operating activities

 

 

Profit before income tax

19,355,716

9,543,384

Adjustments for:

 

 

Depreciation and amortization

5,924,098

4,498,967

Interest expense

3,774,168

3,356,941

Government grants

(2,167,458)

(1,306,625)

Interest income

(3,722,605)

(3,520,931)

Loss/ (gain) on disposal of property, plant and equipment

(17,033)

(45,948)

Net (gain) / loss on revaluation of biological assets and agricultural produce

434,812

(4,410,327)

Change in provision for impairment of loans issued

(1,852,295)

3,256,721

Lease financial expense

122,168

129,700

Realised deferred day-one gain

(395,146)

(687,258)

Change in provision for net realisable value of inventory

999,799

366,003

Change in provision for impairment of receivables and prepayments

72,545

(4,045)

Foreign exchange (gain) / loss, net

(96,100)

1,361,408

Lost / (reversal of) harvest write-off

210,464

179,563

Net (gain) / loss from bonds held for trading

1,362

17,002

Settlement of loans and accounts receivable previously written-off

-

(2)

Change in provision for impairment of advances paid for property, plant and equipment

(34,322)

113,203

Change in other provisions

571,009

63,174

Dividend income

(377,269)

(186,506)

Other non-cash and non-operating expenses, net

(61,794)

(83,801)

Operating cash flow before working capital changes

22,742,119

12,640,623

Change in trade and other receivables and prepayments

(1,908,398)

382,332

Change in other taxes receivable

(5,552,282)

984,212

Change in inventories and biological assets

(1,607,811)

5,127,762

Change in trade and other payables

2,213,800

618,965

Change in other taxes payable

6,096,652

(441,051)

Cash generated from operations

21,984,080

19,312,843

Income tax paid

(636,256)

(259,595)

Net cash from operating activities

21,347,824

19,053,248

 

 

 

 

 

Appendix 4 (continued). Consolidated statement of cash flows the Six months ended 30 June 2021 (in RUB thousand) - NOT IFRS PRESENTATION (*)

 

 

 

Six months ended

 

30 June 2021

30 June 2020

Cash flows from investing activities

 

 

Purchases of property, plant and equipment including SolPro assets acquisition

(17,682,805)

(4,016,179)

Purchases of other intangible assets

(201,571)

(237,793)

Purchases of land lease rights

(25,828)

-

Proceeds from sales of property, plant and equipment

175,297

79,507

Purchases of inventories intended for construction

(228,460)

(808,586)

Purchases of associates

(56,600)

(35,000)

Movement in restricted cash

104,163

-

Dividends received

377,331

186,506

Other investing activities

127,849

66,488

Net cash from investing activities

(17,410,624)

(4,765,057)

Cash flows from financing activities

 

 

Proceeds from borrowings

75,517,913

31,110,339

Repayment of borrowings

(10,206,491)

(42,937,117)

Interest paid

(2,042,736)

(2,161,798)

Change in cash on bank deposits

(28,000,000)

-

Proceeds from sales of bonds with maturity over three months*

220,282

-

Purchases of loans issued*

(281,445)

(1,840)

Loans repaid*

7,807,779

696,560

Interest received*

3,255,728

2,628,790

Proceeds from government grants

869,393

544,868

Dividends paid to owners Ros Agro PLC

(10,666,996)

(3,216,539)

Repayment of lease liabilities

(55,068)

(70,432)

Other financial activities

(45,633)

-

Net cash from  financing activities

36,372,726

(13,407,169)

Net effect of exchange rate changes on cash and cash equivalents

(101,974)

172,642

Net increase/ (decrease) in cash and cash equivalents

40,207,952

1,053,664

Cash and cash equivalents at the beginning of the period

11,866,798

2,170,779

Cash and cash equivalents at the end of the period

52,074,750

3,224,443

 

 

(*) For the purpose of conformity with the methodology of the Group's net debt calculation investments in financial assets related to financial activities are presented in Cash flows from financing activities in the Group's management accounts.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR GPURARUPGUQQ